Aerojet is considering increasing its $2 billion offer to buy ULA


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The competition heats up: A news report today suggests that Aeroject Rocketdyne is considering increasing its $2 billion bid to buy ULA, thus forcing that company to use its rocket engines rather than Blue Origin’s.

The article contains a lot of information that helps explain the background behind Aerojet Rocketdyne’s offer as well as ULA’s recent switch to Blue Origin. For one thing, ULA apparently dumped Aeroject because the company refused to invest any of its own money in developing a new rocket engine.

Last summer, Aerojet’s board also rejected ULA’s request that Aerojet invest $300 million to accelerate work on the AR-1 engine it is developing as an alternative to the Russian RD-180 engine that powers ULA’s Atlas V rocket, the sources said. … Aerojet’s refusal to invest more in the AR-1 engine ultimately drove ULA to opt for the BE-4 engine being developed by privately held Blue Origin, which is owned by Amazon.com founder and billionaire Jeff Bezos, the sources said.

More significant, it appears that the Rocketdyne portion of the company is owned by the Russians!

An Aerojet takeover of ULA would also require Russia to give its regulatory approval and transfer a technology license for use of the RD-180 engines, according to two of the sources. Russia refused to transfer the license to Aerojet when it bought Rocketdyne from Pratt & Whitney, a United Technologies Corp (UTX.N) unit in 2013, forcing Pratt to retain control of a small company that brokers RD-180 sales, and could be more reluctant to do so now, the sources said.

While the quote above is somewhat confusing, it certainly suggests that, with Congress banning the use of Russian-built engines in American rockets, using Aerojet Rocketdyne engines by ULA has become problematic.

In related more bad news for Aeroject Rocketdyne, the company has just agreed to pay Orbital ATK $50 million in connection with last year’s Antares launch failure. In addition, they will take back the Russian-built engines they refurshed and sold to Orbital. The agreement also ends the company’s part in Antares.

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3 comments

  • wodun

    For $2b they could design and build their own rocket. This would put them on equal footing with their competition. SpaceX builds their own engines and rockets and so does Blue Origin. BO will also sell their engines to other customers and my guess is that if they achieve reusability, they will license that technology to ULA or anyone else who can pay for it.

  • Tom Billings

    Wodun, for anyone to build and develop a competitive launcher for $2 billion, they would have to have a corporate culture allowing them to do what is needed for that. A/R don’t have it. Practically every part of Aerojet/Rocketdyne has been immersed in the cost+ contract culture for over 50 years. That a large part of the company is owned by Russians is just another nail in their coffin. I cannot understand what their board was thinking when that happened. In fact, some oversight hearings of the US regulatory approvals for that might reveal very interesting attitudes in the US regulatory bureaucracy. Russia’s corruption in aerospace may not be so singular as thought, previous to this.

  • Edward

    It looks like Aerojet Rocketdyne does not have enough money to develop a rocket engine, much less an entire rocket, otherwise they would acquiesce to ULA’s insistence that they spend some of their own money on it and remain ULA’s supplier.

    The article says that there was not much documentation showing how the company would come up with the $2 billion it offered. It may be dependent upon a potential loan that is backed by the value of ULA, although with the current engine troubles ULA’s value may not be what it used to be.

    Although Aerojet Rocketdyne is still selling engines to others, specifically the RS-25 and J-2X for the SLS, they may be desperate to keep supplying a major customer. Otherwise, they may have to downsize rather dramatically. When SLS stops flying, in a decade, they may be out of business entirely.

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